UC Service Center Relief Bill on its Way to Governor

Posted on Apr 25, 2017

The Senate approved a bill last Wednesday that provides emergency funding to ease the hardships Pennsylvania’s unemployed workers have endured since three Unemployment Compensation Service Centers were closed late last year. The legislation now goes to the Governor for his signature and enactment into law.

Senate Bill 250 reallocates a portion of payments made by employees to support the UC system to the Service and Infrastructure Improvement Fund (SIIF). This move allows hundreds of UC employees, furloughed right before the holiday season, to return to work, and helps reduce the unacceptably long wait times claimants have experienced for unemployment benefits.

In addition, the bill requires the Department of Labor and Industry to provide the General Assembly with more information to determine the changes needed to ensure the long-term stability of the UC system technology platform. For four years, the Department tapped more than $178 million for technology upgrades and other operating costs, often foregoing critical infrastructure needs for day-to-day operating needs. These expenditures are currently under review by the state Auditor General.

When the Senate questioned how these dollars were spent, it forced an additional in-depth examination of the Commonwealth’s contract with IBM, and ultimately led to the filing of a lawsuit by the governor.

Our tough questions also prompted some important accountability provisions, including the following provisions:

Requiring the Department of Labor and Industry to maintain separate accounting for SIIF and to submit a monthly report to the House and Senate Labor and Industry Committee chairs to include:

An accounting of the SIIF monies for the prior calendar month.

An update on UC system operations.

An accounting of total funds spent on the administration of the UC system for the prior calendar month.

An update on the progress of the procurement of technological upgrades to the delivery system for UC benefits.

Requiring the department to submit a report to the House and Senate Labor and Industry Committee chairs by June 15, 2017 describing its plans to end reliance on SIIF for recurring operational costs.

Requiring the department to provide a report to the House and Senate Labor and Industry Committee chairs prior to closing a UC service center detailing performance data and operating costs for all service centers.

Requiring that any supplemental request to the General Assembly by the department to utilize SIIF for technological upgrades must include a proposal to include:

A description of the project;

An explanation of expected improvements;

Total estimated cost by year and all funding sources to be utilized;

Total cost savings to result from upgrades;

A time period for project completion;

Information on proposals received or contracts executed if accessible under the Right-to-Know Law; and

A detailed description of how upgrades impact any recommendations in the Auditor General’s special performance audit.

These safeguards were among the most productive changes to emerge from last year’s UC funding stalemate. These accountability provisions are designed to prevent a crisis in the future and the potential loss of taxpayer dollars. The lawsuit may help to recoup some of the costs already expended and will compel the department to upgrade its technology, to wean itself off funding in the future, and to plan more effectively for the years to come.